Qualcomm CEO: Intel is not an option today. We would like Intel to be an option

[hist78]

Remember, it takes more time to design and tape-out a complex chip than it takes to build a fab. LBT was right on the money about not building fabs without customer orders. TSMC does not build fabs without customer orders. The problem TSMC has had in the past is competition not yielding and customers over ordering from TSMC. Now TSMC does not have competition so it is easier to plan capacity requirements. When you hear CC Wei constantly saying capacity is tight on investor calls that means he is doing his job.

Yes, it’s a tough situation for a latecomer like Intel Foundry.

On the other hand, we need to understand that Intel must maintain maximum flexibility to choose between internal and external foundries in order to stay competitive. A constrained and weakened Intel Product division won’t be able to sustain itself, let alone provide the capital needed to fund Intel Foundry. Intel Product’s revenue, profit, and competitiveness must be the top priority over Intel Foundry.

Intel’s customers and competitors (and there are many) won’t wait for Intel Product and Intel Foundry to sort out all its issues such as technology, cost, capacity, roadmap, finance, and capex allocation.

 

[XYang2023]

Remember, it takes more time to design and tape-out a complex chip than it takes to build a fab. LBT was right on the money about not building fabs without customer orders. TSMC does not build fabs without customer orders. The problem TSMC has had in the past is competition not yielding and customers over ordering from TSMC. Now TSMC does not have competition so it is easier to plan capacity requirements. When you hear CC Wei constantly saying capacity is tight on investor calls that means he is doing his job.

Could Intel, Samsung, and Rapidus unite their efforts to develop a 14A-equivalent node? Or a node following 14A?

 

[hist78]

The problem TSMC has had in the past is competition not yielding and customers over ordering from TSMC. Now TSMC does not have competition so it is easier to plan capacity requirements.

Or we could say that fabless companies should not expect foundries like TSMC or Intel to shoulder the multibillion dollar investment risks of running underutilized equipment and capacity.

In the spirit of “free lunch,” let’s call this “spare capacity.” If fabless companies are unsure or unwilling to commit to larger contracts, why should foundries pay upfront to provide that spare capacity?

 

[siliconbruh999]

700,000 wafers per year for both fabs combined is the last estimate I heard but that was before LBT became CEO. I did hear recently that 18A is doing well in Fab 52 but demand is the real question. Intel really needs to stop designing to TSMC. Lip-Bu will make sure of that, I do not think he wants to be fabless and neither does the US Government.

700K is nice but i don't think they will reach this capacity before 3-4 years

Or we could say that fabless companies should not expect foundries like TSMC or Intel to shoulder the multibillion dollar investment risks of running underutilized equipment and capacity.

In the spirit of “free lunch,” let’s call this “spare capacity.” If fabless companies are unsure or unwilling to commit to larger contracts, why should foundries pay upfront to provide that spare capacity?

agreed if you want wafer you have to pay for it no free lunch for anyone except for Intel products even that is not free

 

[benb]

Many people argue that Intel can’t split into two separate companies, Product and Foundry, because the Foundry side depends on the Product side for funding. By that logic, Intel’s Product division has to get stronger first.

I'm one of those people. I think the object should be to reduce debt, to enable separation. They are walking that path: The $8.9 billion and $2 billion Softbank is largely for debt reduction, and they are separating P/L and ERP according to Zinsner. Debt is the obstacle to separation in my opinion. And debt may be the obstacle to equip Intel fabs with more capacity than 30K a month. 30K won't yield a profit on the Foundry side, and it may not even reduce losses much. So yeah, Intel needs to be fab heavy again, to bootstrap a foundry, but it comes with upfront costs which they probably can't bear in their present financial condition. A real pickle.

Why is debt an issue? Some Intel creditors are secured since PG made deals. If I was unsecured I would feel pretty naked. Intel has to roll $32 billion in debt in the next year, and not all creditors will be able to be secured. It's some tough sledding ahead to sell that debt. Or maybe that $32 billion will become equity.

 

[XYang2023]

I'm one of those people. I think the object should be to reduce debt, to enable separation. They are walking that path: The $8.9 billion and $2 billion Softbank is largely for debt reduction, and they are separating P/L and ERP according to Zinsner. Debt is the obstacle to separation in my opinion. And debt may be the obstacle to equip Intel fabs with more capacity than 30K a month. 30K won't yield a profit on the Foundry side, and it may not even reduce losses much. So yeah, Intel needs to be fab heavy again, to bootstrap a foundry, but it comes with upfront costs which they probably can't bear in their present financial condition. A real pickle.

Why is debt an issue? Some Intel creditors are secured since PG made deals. If I was unsecured I would feel pretty naked. Intel has to roll $32 billion in debt in the next year, and not all creditors will be able to be secured. It's some tough sledding ahead to sell that debt. Or maybe that $32 billion will become equity.

If they exit Mobileye and Altera, could they half that 32 billion?

 

[chip99monk]

Qualcomm Inc. Chief Executive Officer Cristiano Amon said Intel Corp.’s production technology isn’t currently good enough for the maker of mobile phone processors to use as a supplier. If Intel is able to advance its manufacturing techniques to produce more efficient chips, then Qualcomm would consider becoming a customer, Amon said Friday in an interview on Bloomberg Television’s Bloomberg Tech.

“Intel is not an option today,” Amon said. “We would like Intel to be an option.” Instead, the CEO said Qualcomm will stick with current producers Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. Qualcomm is a designer of chips that, like most of the industry, relies on outsourced production. Intel, formerly the world’s largest chipmaker, is trying to turn around its fortunes by attracting outside customers, such as Qualcomm, in addition to manufacturing its own designs. The San Diego-based company, which gets the majority of its revenue from selling processors that are the heart of Android smartphones, is undergoing its own transformation but from a stronger base than Intel, which is facing shrinking sales. Under Amon, Qualcomm is pushing its mobile technology into new markets, such as automotive, seeking revenue growth that doesn’t depend on a smartphone boom. It has told investors it can secure $22 billion in revenue from automotive and connected devices by 2029.

To convince Intel competitors like QCOMM to use Intel Foundry service and thus help make Intel a stronger competitor would require IFS to provide overwhelmingly superior capabilities ( say at least 2 nodes ahead of the current pure play Foundry provider for Fabless co.services , 50% superior in all common metrics like density, speed and power, … plus respectable Fab Yields and Wafer costs at most 20% higher ). This was not recognized or admitted by Pat Gelsinger gunning for 18A ( w/ a less than competent crew ) who also showed immaturity / hubris by expanding to Ohio, perhaps to get more incentives from CHIPS run by a pack of unqualified politicians and crypto scientist bureaucrats and instant experts from top down. It is easier for Intel to recover by improving its Chip Designs ( not just Legacy but expand into AI ) rather than chase the Foundry mirage. But there are still ways in which Intel can leverage its Fab strengths ( few that they are ) and justify remaining an IDM. But even the “new” ( already 6 mo.s into its tenure ) Management is not technically qualified to pull it through.